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LETTER OF TRANSMITTAL
To
Dr. Golam Mohammad,
Faculty; Production Management,
School Of Business,
North South University,
Banani, Dhaka.
August 10, 2002
Sir,
We would like to thank you for giving us the opportunity to have real world
exposure in Production Management. We are delighted at this moment for
completing the paper with so many limitations.
We have been assigned this paper as a partial requirement of Mgt-314. As
students of this course we are grateful that we have got this opportunity, which
helped us to apply the theories of Production Management.
We have tried to put our best rigor preparing this paper. It would be our pleasure
to be of any assistance, in case of any further clarification regarding this paper.
Yours sincerely,Hasan Amin Answary I.D-982-014-030
Md. Rizwanul Islam I.D- 011-077-030
Tanbhir Ahmad Tahlil I.D- 011-243-530
Md. Muktadir Alam Chowdhury
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General Pharma
ORIGIN OF THE TERM PAPER:
Our distinguished faculty Dr. Golam Mohammad informed us that we would have
to submit a business proposal on a company in Bangladesh context
requirement for Mgt-314 (Production Management). We decided to do the
report on General Pharma, one of the emerging Pharmaceuticals company
in Bangladesh. We are really grateful to our honorable faculty for assigning
us with such a project because this project has given us a chance to obtain
real life exposure in the field of Production Management. I am submitting
this report on August10, 2002.
PURPOSE OF THE REPORT:The main purpose of the report is to apply the knowledge that has been acquired
in this course, in understanding how we manage a new business organization,
What are the things that I should think about, How can I evaluate whether this
particular project is working efficiently or not, what are the things that satisfy
different customers of different culture and relate all over the corporate strategy.
OBJECTIVE OF THE REPORT:
The main objective of this report to bridge the gap between textbook
knowledge and real life practices and evaluate this concept in context of
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our General Pharma. Its object is to get clear picture of business of
Pharmaceuticals industry.
SCOPE:The scope of the report was that, I got the opportunity to apply what we have
learned in the classroom in the outside world and make a judgment of the
combination of the real life and bookish example. It also taught us to prepare an
effective idea and attitude that helps a lot to find out the truth very easily.
LIMITATIONS:Certain data that we required were not provided by the present company, neither
in the website nor in magazines or other available sources that I have looked for.
METHODOLOGY:The methodology of the report includes the collection of data through primary
source and secondary source, but the main source was Primary data.
INDUSTRY BRIEFINGINDUSTRY BRIEFING
An Overview
The pharmaceutical industry is one of the dynamic industries in Bangladesh and
it plays a vital role in our economy. Pre liberation there was not many
pharmaceutical companies existed in this part of the country. Most of the
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industrial sector was developed in the West and therefore, East was neglected
for industrial growth. After liberation we had no alternative but put more emphasis
on developing new industry. But due to lack of capital and infrastructure facilities
our growth was very slow. Only a few pharmaceutical companies were continued
their operation after liberation. During early and mid-eighties several companies
launched their operation with joint venture or with technical collaboration with the
well-known companies of Europe. Such as Bayer, Ciba-Gaigy, Brystol Mayer,
Glaxo, U.K., Hoechst, BASF, SK&F.
In comparison with other industries, we found the growth of this industry is
tremendous and is ever increasing. Its productions and operations have more
than doubled in the last ten years. Since it is a very sensitive and risky industry,
the companies must follow the drug, health and hygiene policy. All of them must
have to be registered by "Drug Administration Registration". Moreover, these
companies cannot produce and operate what ever they prefer. There are some
stringent rules and regulations, which must follow and abide by at all time. There
are about twelve companies are publicly traded. Among them three or four of the
firms are doing exceptionally well to meet or exceed the international quality
standards at all time. Recently, the International Standard Organization (ISO)
with ISO 9001 has awarded the Beximco Pharmaceuticals Ltd (BPL), Square
Pharmaceuticals, and Advanced Chemical Industrries(ACI). These three are the
major players in the industry and currently they hold about 80% market share.
Other nine publicly traded companies hold about 15% and rest of the other
private and multinational companies hold 5% market share.
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Bangladesh has recently started to export medicine. This has influenced our
economy growth. At present 10% of total production is exported to Asia, Africa &
Europe.
Market Value of the Industry: 14 billion Taka
Total Employment Provided: 8 %
Industry leader
Beximco Pharmaceuticals Ltd (BPL) is the largest manufacturer of quality live
savings drug and medicine in the industry. It has captured already 45 % of the
total market. Since its inception in 1979 with 39 employees and today it has 2700
employees throughout the country. As pharmaceutical companies are growing
rapidly they are creating jobs. Thus, companies increase its products and
productivity through research and development, which will create more demand
and eventually more employment opportunity. Now BPLs products are sold in
more than 16 countries across 3 continents (Asia, Africa and Europe). They have
spent $1,000,000 for obtaining antibiotic production technology. After reviewing
the financial report of several companies we found that most of the companies
overall performance level have been satisfactory and they have steady growth.
SOURCE: Bangladesh Aushad Shilpa Shamiti,
Medical Review Journal
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COMPANY BRIEFINGCOMPANY BRIEFING
General Pharmaceuticals Ltd. (GPL) is one of the new comers in the
pharmaceutical industry, having launched effective operation from the year 1987
reached its marketing operation in 1991. Since, the company size is moderate
and it is in growing stage they are currently under construction for expansion of
their production facilities and layout. In their production facilities some are
manual and some are semi-automatic. By our physical visit we found out some of
the obvious reasons for losing effective production time and not attaining
production to its optimal capacity. By careful quantitative analysis and
rearranging the sub-processing units the company can increase its productivity
by 20-30% without investing substantial amount of capital. Also, we have found
that some of the equipments and machineries are out dated and human factors
are much neglected. They do not have highly specialized job training.
From the 80s multinational companies (MNC) like Glaxo, Fisons, Ciba-Geigy etc.
dominating the total pharmaceutical market. Some present giants like Beximco,
Square, Acme, Opsonin were yet to develop with modern marketing concepts.
With the blessings of the drug policy 1982 the Drug Administration Authority
restricted the import of low-tech products to enhance the development of local
companies. That was the turning point for the company to flourish. With a very
small initial investment and a small marketing network it started and after 13
years it has achieved the 17th position with 50 products among the
pharmaceutical companies of Bangladesh. Now General Pharmaceuticals Ltd.
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has a team of young energetic and enthusiastic professionals having experience
in all the functional area of management.
In 1995 General Pharmaceuticals Ltd. started marketing three most essential
imported drugs of Torrent Pharmaceuticals, India in Bangladesh like anti cancer,
anti hypertensive drug. General Pharmaceuticals successfully established the
sophisticated imported items from Torrent Pharmaceuticals by which General
Pharmaceuticals has created a market image in the pharmaceuticals market of
Bangladesh.
Organization
General Pharmaceuticals Ltd. is a private limited company headed by Managing
Director, Dr. Momenul Haique (Physician). The organ gram here will show
alSource departments at a glance.
Any more information on these departments is available in appendices of this
report.
Vision 0f General Pharma:
7
Source: General Pharmaceuticals, Headquarters
MANAGINGMANAGING
Marketin
Sales
Administ
Accounts & Commercial Factory
MIS Dept.
Product
Distributio
Product
ion
Quality
Control
Company Organogram
Source: General pharmaceuticals
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General Pharma
Vision of General Pharma:
General pharma plays a leading role in improving the quality of life and well being
of people of Bangladesh through responsible application of knowledge and skills.
Mission of General Pharma:
General pharma will devote its resources to provide products and services of
high and consistent quality which ensure value for money to its customers.
To create an image for quality of its products and services, productivity of its
operations and innovative abilities of its employees.
To ensure superior return on investment through healthy and sustainable growth
of the company.
To contribute to the personal development and well being of the employees.
To encourage and support qualitative improvement of the services of its
distributors and suppliers.
To participate in selected government/non-government projects and in
community services for the attainment of social goals.
HUMAN RESOURCE:
General Pharma's most vital resource is its people. Its dedicated teams of
professionals from various disciplines are integrated in a conducive environment
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to best achieve the company's objectives. People at General have one common
trait, they strongly believe in the company's philosophy of serving the nation and
Contributing to society as a whole. The General Pharma team continuously
strives to alleviate human sufferings by developing new and improved drugs.
BPL places very high priority on developing its human resources. The company
makes considerable investments in attracting, training and developing talented
and dynamic professionals. Over the years, the company has been successful in
providing an environment that nurtures individual growth and development and
allows people to achieve personal fulfillment.
Over hundreds of young, energetic and highly motivated individuals from different
cultures and diverse disciplines such as Pharmacy, Chemistry, Biochemistry,
Microbiology, Medicine, Engineering, Business Administration, Accounting etc.
make up the General Pharmas team.
BPL's sales force of over 50 highly professional representatives ensures the
timely promotion and smooth delivery of its products to every part of the country.
What makes people at General Pharma unique is not just the strength of their
professional competence, but also their reliance of character and spirit of
enterprise.
STRENGTH:
The company stands out for its strong product differentiation, progressive
management, and aggressive exploration of opportunities, such as penetration of
international markets, introduction of newer drugs and high tech dosage forms.
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A good relationship with the medical community and an innovative marketing
approach distinguish the Company brand. The company has identified the key
areas that will support future growth - strong ties with the medical community, a
comprehensive management information system, and a team of highly motivated
and skilled employees
Product Quality Policy:
Medicine is directly related to human life and therefore, its manufacturers have
immense social responsibility of providing safe and effective medication. From its
Very inception, General Pharmaceuticals has always emphasized the need for
uncompromising quality.
General Pharma strictly follows WHO guidelines at every stage of manufacturing
and procures its raw materials from the very best sources. But what makes
General a success story is its people. General's team of highly skilled and
motivated professionals work around the clock to guarantee the safety and
efficacy of its products.
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General takes great pride in its people. At General they believe that it is their
people that set them apart.
Marketing of General Pharma:
For any corporation marketing these days has become an essential part of
business. The very term Marketing can be defined as a good job of
understanding consumer needs and wants, develop products that provides
superior value and price, distribute and promote them effectively.
General pharma as large corporation has a great collection of product line in its
various divisions that obviously need a very firm marketing strategy. Now, the
term marketing strategy theoretically means that steps that are to be taken to
position a product to the consumers. General pharma definitely has some
different marketing strategies. In fact we have come to know that General
Pharma has different marketing strategies for its different products while we
interviewed the Marketing Manager. As its marketing strategies vary with respect
to its products, the other tools of marketing also vary. That means, segment and
segmentation, distribution and promotional activities etc of vary according to its
products.
Now let us have a brief view about what are meant by terms segmentation,
distribution and promotion. The term segmentation means dividing the market
into distinct group of buyers with different needs, characteristics or behavior that
might require separate products or marketing mixes. The term distribution
means the process involves in marking a product or service available for use or
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consumption by the consumer or business user. The term promotional activities
means the specific mix of personal selling, sales promotion and public relation a
company uses to pursue its marketing objectives.
General pharma also takes special attention on the total quality management of
its products all divisions by constantly improving the its all the products. The
corporation has also set up its marketing mixes of all the products very effectively
and efficiently.
STRENGTH:
The company stands out for its strong product differentiation, progressive
management, and aggressive exploration of opportunities, such as penetration of
international markets, introduction of newer drugs and high tech dosage forms.
A good relationship with the medical community and an innovative marketing
approach distinguish the Company brand. The company has identified the key
areas that will support future growth - strong ties with the medical community, a
comprehensive management information system, and a team of highly motivated
and skilled employees
Marketing strategies of Pharmaceutical Division:
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Segment:- From an overview, we have noticed that the segment for the major
products of pharmaceutical division is almost all the districts and sub-districts of
the country.
Segmentation:- Segmentation of pharmaceutical division for most the products
are general people of the country. That means the segmentation of this division
in all class of people of Bangladesh.
Distribution:- The pharmaceuticals division has recently expanded and
strengthened its cold chain network covering all the 14 distribution points through
the country.
Promotional Activities:- The promotional activities of the division actually is
influencing the local physicists to recommend its medicines. It also makes deal
with the local dispensaries to make a great sale. It also has some advertising
policies.
PRESENT THREATS & PERFORMANCE:
Pharmaceutical business turnover of the company was almost at par with the
level of the previous year, so was the national market according to the IMS data.
The result was achieved in spite of several new pharmaceutical manufacturing
companies entering the market as well as permission given to an Indian
company to market their imported finished dosage forms, in violation of the
stated policy of the government not to allow import of finished products in cases
where local production capacity is sufficient.
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General Pharma introduced several new dosage forms developed in their
laboratories, including eye preparations. They have also obtained approval from
drug administration for marketing some researched products from their
principals. They have further expanded and strengthened their cold chain
network, covering all the 14 distribution points through the country, in order to
improve the distribution of insulin and other temperature sensitive products.
All the plants for expansion and modernization of the Pharma production and
distribution facilities under the right issue have been implemented. Their
productivity will have significant improvement in the coming months as they
realized the benefits of the investments made.
Factory Report:
The General Pharmaceuticals Ltd. has a large factory premises at Mouchak,
Kaliakoir, Gazipur. The total area of the factory premises is 66 decimal. The
factory has a production capacity of 50 million taka (10,20,408 USD) per month
in terms of value. The Factory is divided into two departments:
a. Production Department
b. Quality Control Department
a. Production Department: One assistant production manager
heads Production Department. He is a pharmacy masters. There
are three units in production department:
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i. Liquid Section
ii. Tablet and Capsule Section,
iii. Blister, strip and Packing Section.
There are four production officers, two QC officers. All of them are
pharmacy masters'. There are eight production supervisors, fifteen
machine operators, eight process men, and forty-five general
workers in production department.
The production data of 2000 is given here in the next page:
Category Capacity per annum Production
Tablet Compression 120.00 million tablets 88.0 million tab.Tablet coating 75.54 million tablets 45.0 million tab.Capsulation 140.10 million capsules 80.0 million cap.Powder filling 2.50 million Kg 1.80 million KgTube crimping 0.46 million tubes 0.20 million Lts.Liquid filling 1.00 million liters .75 million Lts.
TABLE: Category wise Capacity
Source: General Pharmaceuticals
Factory
The factory production capacity is over utilized by running the machines in two or
three shifts and over time.
In the factory we find three types of labors. The number and types are shown in
the following table-
TYPES OF LABOUR NUMBER OF LABOUR SALARYPermanent 40 2000 Taka per monthCasual 30 60 per day
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Daily 20 48 per day TABLE: Category of Labour
Source: General Pharmaceuticals
b. Quality Control Department: The quality control department of
General Pharmaceuticals is in the factory premises at Gazipur. The
assistant quality control manager takes care of the entire quality
control operation. There are three quality control officers, one
microbiologists, two quality control supervisor, two laboratory
assistants are working in quality control department.
The quality control department mainly looks after quality control in the
manufacturing unit to keep the reputation and image of the company high.
Product Line
The following pharmaceutical products make its line up of finished formulations--
1. In the anti-hypertensive class our product
i) Calchek(Amlodipine)
2. In the vitamin/Iron preparation class the products :-
i) Genaplex(Vitamin B complex) Capsule
ii) Genaplex (Vitamin B complex)Tablet
iii) Genaplex (Vitamin B complex)Syrup
iv) Irofol (Iron Preparation)Capsule
v) Irofol (Iron Preparation)suspension
vi) Metabol drop
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3. In the Bronchodilators / Anti-asthmatics class the product is: Salbut
(Salbutamol) syrup.
4. In the anti-mycotic class the product is : Genafield Ointment
5. In the antibiotic class the products are -
i) Geflox (Ciprofloxacin)250/500 mgTablet
ii) Velogen (Cephradin)250/500mgCapsule/Dry Syrup
iii) Doxigen(Doxicycline) 100 mgCapsule
iv) Genamox (Amoxycillin)250 and 500 mgCap./ Dry Syrup
v) Gentrim (Co-Trimoxazole)Tab. / Suspension
vi) Genamox (Amoxycillin)Peadiatric Drop
vii) Velogen (Cephradin)Peadiatric Drop
viii) Nufex(Cephalexin)500 mg capsule/Dry Syrup
6. In the anti protozoal / Metronidazole class the product is Metrion
suspension / Tablet
7. In the anti histamine class the product is Hitagen Tablet/Syrup
8. In the ulcer-healing class the products are :
i) Gepin (Ranitidide) tab and Syrup(100 and 250 ml)
ii) Genacid (Antacid) tab
9. In the analgesics class the products are Genamol (paracetamol)Tablet /
Syrup.
10. In the Anthelmintic group the product is Alzed(Albendazole) Tablet.
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11. Antidiabetic:Gored(Gliclazide)Tablet
12. Opioid Analgesic:Trumen(Tramadol) Capsule
Anti Stroke:Cereton(Vinpocetine)
Source: General Pharmaceuticals
THE PRODUCTIOIN PROCESS:THE PRODUCTIOIN PROCESS:
The General Pharmaceutical Limited is making different medicine. Most of them
follow the same process- major difference is in the ingredient and the time
requirement in each process. In our term paper we have only considered one
medicine that is paracytamol - in this company it is called " Genimol".
After receiving the raw materials from the suppliers, they first store them and
then a sample is sent to the " Quality Control" department. If they meet the
requirement of standard then the materials get an approval from that department.
Each of the approved material containers gets a sticker on it. It is written "QO
Release" on the sticker. After that the materials are ready for used in the process
of the medicine.
The product we are dealing with have 11 sub-processing units in its production
line. They are described below-
1. WEIGHING:
This is the starting process of production. Here, they weight ingredients; those
are needed for the tablet " Genimol. The materials those are needed for the
tablet already mention this pharmacist.
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The following table is showing the ingredients needed according to weight-
Sl. No. INGREDEINTS WEIGHT1 Paracytamol 500 mg2 Maiz starch 10 mg3 Povidon K- 30 10 mg4 Talcom Powder 4 mg5 Magnessium
Stearet
4 mg
6 Aluminium Foil 35 mg7 PVC Film 175 mg
TABLE: Ingredients of each tablet
Source: General Pharmaceuticals
2. SIEVING:
The ingredients are sieved separately so that if any other particles are there - it
can be removed easily.
3. DRY MIXING:
In this stage all the materials are given in the " Dry Mixture " machine. Except
telcom powder and magnesium stearate, all other ingredients are mixed there.
4. WET MIXING:
The output of dry mixing is then mix with water. Thus the paste is made here.
5. DRYING:
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The paste, made in above process contains much more water. The excess water
is evaporated through drying machine. In this room there is no air condition. After
drying the paste, it is turned into a molded form.
6. SCREENING:
Then the molded form is transformed into granular form under this process. The
granular is very small in size.
7. LUBRICATION:
In this stage talcum powder and magnesium stearate are mixed with the
granules. It will help to get uniformity in all the tablets. The finishing of the tablets
will be also very smooth.
8. COMPRESSION:
Here the granules get the tablet forms. The machine is set according to the size
they want to get.
9. DEDUSTING:
After compression, there is lot of dust on the body of tablets and these are totally
cleaned in this process. Moreover the rejected tablets are also marked here.
10. BLISTERING:
The tablets then come under strips. Two types of blistering we have found here.
One is making " ALU-ALU" blister - it means on both side of the tablet there
comes the thin aluminum cover. The second machine is making "ALU-PVC"
blister- it is the way that make the tablet transparent from one side with the PVC
material and the thin aluminum comes in the other side.
11. PACKING:
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After the blistering is completed - the next come the packing. It is totally manual
there and done by the three different labor groups who are again independent
from one another. Again since the packing is same for both type of blistering, it
does not matter which type of medicine is going to which packing group.
At last the product goes for inventory. The production management ends here.
They fulfill the order slip, provided by the marketing department. Thus they meet
production schedule. In our paper we have considered up to this stage. So
whatever the change we have proposed it concentrates only and only this range.
There is a major contribution of" Quality Control" (QC) department throughout the
production process. Starting from pre-storage till packing they can check quality
at any stage to assure the best one.
Here we find that if the raw materials are rejected only then those go back to the
suppliers. On the other hand, from any other stage, the rejected items will be
considered just as scrap. The production process is stopped immediately.
First we consider on the current layout of the company- that is given in the next
page. There we find that the current layout is a totally massed up. The production
started from the right hand side and in the third stage it shifted to the left. No line
arrangement is there at all. The product needs to move from the same place
more than one time, thus increasing processing time unnecessary. Two of the
sub-processing units are in the 1st floor that takes more time. They are the
Dedusting and Blistering. One blistering machine is in ground floor, too. The
layout is also showing that there is a lot of free space - unutilized, in the ground
floor.
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Description OF THE PRESENT LAYOUT:(Please see Present Layout and Present Logical Diagram in the Appendix)
There are two exit and entry, to and from 1st floor. These exit and entry are on
both end of the factory facility. As we enter through the main entrance there is
screening, drying, wet mixing and dry mixing compartments on the left hand of
the corridor. Again, the weighing, sieving and storage room are on the right hand
side. At the far end of the corridor there is lubrication and compression chamber
on the left and solid packing room on the right.
Taking the left passage we can see the on staging process of syrup. Since we
are not concerned with syrup process we won't be talking about that in our report.
Taking the first passage on the right we see another connecting passage. At the
left end of the connecting passage there is printing chamber and a strip machine
chamber. On the right of the connecting corridor there are some unused space
and again an unused dryer.
You have to take the stairs to go to the 1st floor. This stair is situated at right
side ..of the factory facility. The first thing you see is a passage leading to the
administrative block and in front there is quality control department. Taking the
passage you will see the blistering room on the right and de-dusting chamber on
the left. Not to forget the final storage in under the stairs in the ground floor. From
here the final product are distributed throughout the country.
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As it is evident form the layout picture, that there are quite some unused space in
the factory facility.
REASONS FOR THE PRESENT LAYOUT:
According to the managing director, while starting the company, they didn't
expect such a big demand in the market. So they invested a small. As a result,
the factory layout is small enough. On the other hand the equipment, they bought
at that time was also lower capacity. Now they have found the high demand. But
the problem is that already they have invested a big amount in acquiring their
fixed asset. If they try to buy new machine with higher capacity and build up the
factory construction again, then it will ask for a huge amount of money. That is
why they can't just change all these over a night and meet the higher demand.
Problem Identification:
System design is how an organization plans to produce its goods or its services.
The following diagram expresses the process selection and system design:
Source: Production/ Operations ManagementWilliam J. Stevenson
23
Forecasting
Product and
Service
Design
Technological
Change
Process/
Selection
n
Capacity Planning
Facilities and Equipment
Layout
Work Design
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This company did mistake on the very first in their system design that is
"forecasting". They thought the demand would be very low. That's why they
started the production with small capacity. They were very wrong. This wrong
forecasting gave birth to wrong layout. In this way their capacity went down. They
are aware of the technology and slandered product design. The poor forecasting
results in inadequate process selection. Finally they came up with un-optimized
layout and unmanaged capacity.
So far from the present layout we have found that there is lot of bottleneck at
different places. Most of them are occurring because of the extra material
handling time and our approach is to reduce total processing time that will
ultimately eliminate bottleneck problem by arranging product layout, with
dedicated sub-processing units, in the production.
Now let's observe what is needed to change the layout in this company.
If we apply product layout then the outlook we will get is given in the next page.
The new outlay will reduce the material handling time a lot - we believe. In this
layout, the entire 11 sub-processing unit will be in the ground floor. The quality
control section will also be here. So it can save more time.
DESCRIPTION OF THE PROPOSED LAYOUT:
We have found here that medicine is a product where process dictates the
sequence in which the steps must be performed. The equipment necessary in
different sub-processing units is arranged in order in which they are needed.
Starting from the weighing (the first step in production) till the packing, each of
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the sub-process is so dedicated that not a single can be done until the previous
one is fully completed.
Here in our proposed factory layout there is only a single main entrance in
ground floor. On the left hand side of this entrance there are six workstations,
which are sequentially arranged in order to accomplish the sub processing tasks.
The first workstation is "Weighing where the raw material is received from the
suppliers. Then the raw materials are sent to the second workstation (Sieving).
Then the ingredients are sent to the third workstation (Dry Mixing), then Wet
Mixing, Drying and then the sixth workstation that is Screening. All these
workstations are inter-connected by the wooden doors. We have kept more two
doors one in Wet mixing and another in Screening for comfortable
communication with other workstations as well as emergency exit. After
screening the ingredients come to the Lubrication, then Compression, and
then it comes to the Blistering Room and from there it goes to the Packing
finally. The quality control department and the printing machine are at one end of
our proposed design against the main entrance. We have kept the Quality
Control Department a bit far from most of the workstations in order to keep all
the workstations close to each other and thus tried to reduce material handling
time as least as possible. Since in our term paper we have only considered one
medicine (Paracytamol), which is called Genimol in the company so that we are
not interested to describe the manufacturing process of other products such
syrup and two cap capsules in our proposed design.
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No doubt the new layout will make the production process much more convenient
and time requirement will also go down. Since they will be able to save time, they
can easily complete another batch of production. Thus they will reach at higher
capacity. That time they also need less labor and thus reduce the cost, too.
By applying the product layout the company can reach at the situation when they
don't have any idle time - it refers to the time that is included in the total
processing time but actually nothing is done in that time. In case of
pharmaceutical plant the idle time is the material handling time - it is consuming
more time than it actually requires.
The number of workstations i.e. the sub-processing units is assigned to perform
certain task along with maintaining the sequence within a standard cycle time.
Since they are arranged in a row they will need the lowest amount of material
handling time.
The cycle time is the lead-time - the total time required to transfer the input to
output. It is determined by the maximum time required at any sub-processing
unit. At present the cycle time for the given company is much more than it really
needs because of the time loss in material handling.
Whereas the summation of those sub-processing units are showing the actual
production time. They have considered only the time they need to complete the
process, not the time that the inputs need to come to that sub-processing unit.
All of these can be proved mathematically. We will also go for that. But
before that let's see how much they need to invest to arrange the product
layout.
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How much to invest?
As we need 5 new doors and also to construct 6 new 10ft by 10 ft brick walls.
The breakdown of all these are given in following:
Cost of new door = Tk. 7,000 = 7000*5 =Tk. 35,000
Cost of making a wall (transportation, labor etc.) = Tk.6,000 = 6000*6 = 36,000
Other costs = Tk. 4,000
So TOTAL COST = 75,000
CONCLUSIONCONCLUSION
In the company, there was bottleneck in almost every sub-processing unit. Thats
why they need much time for material handling. Applying product layout can
reduce this time. Since it is a pharmaceutical company, the production must have
to follow the sequence of sub-processing units. The layout will be perfectly all
right in this case. But if they can reduce the time in material handling, they can
get more time for production process. As they will get more time for production
they can produce more. In this way the capacity will increase.
The capacity will be highest when there will be no material handling time at all.
But in practice it is simply impossible. In each step they must need some time to
transfer material from one unit to another. So obviously they need to spend some
time for material handling. Whatever amount of idle time we can reduce, we will
must get a positive effect on both of required processing time and capacity.
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Therefore from our analysis it is proved that if we can reduce our idle time, we
can on one hand increase the processing time and on the other hand it will
increase capacity.
RECOMMENDATIONRECOMMENDATION
We strongly suggest applying proposed product layout to increase the capacity
and decrease the required processing time. To change the layout they need to
invest, it may increase the per tablet cost. But the output also increases side by
side. Thus the cost will be spread over and a very little effect on the cost will be
there.
WORK CITEDWORK CITED
Books
Production / Operations Management
Author: William J. Stevenson
Operations Management
Author: James B. Dilworth
Plant Layout and Design
Author: James M. Moore
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Websites
www.cl.uh.edu/bpa/hadm/HADM_5731/ppt_presentations/15facmgt/tsld016.htm
www.mfg-excellence.com/botmgmtart12.htm
www.mfg-excellence.com/execsem1.htm
www.amegroup.com/mfgr/npfl.html
www.mel.nist.gov/msidstaff/szykman/research/layout.htm
APPENDIXAPPENDIX
Team Profile
Resume
Quality control Release Voucher
Measurement of Factory Premises
Ingredients of GENAMOL 500mg
Price List
Handbills
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Web Materials
Members Directory 2000
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